Telecoms group ITG, will raise €70.3 million (£55.4 million) in a placing and open offer and plans full share listings on the Irish and London markets.
It is a substantial share issue for the group and will double its stock market value to about €142 million. The market approved, pushing the shares 4.5 per cent ahead to 747 cents on Dublin's DCM and a little better on London's AIM.
Most of the funds raised will be used to exploit the group's card service business. ITG - which recently announced a strategic alliance with Ulster Bank to upgrade and maintain credit card terminals in Ireland - said some of the cash would be used to finance acquisitions and fund research and development.
Asked if the proposed sale of Ulster Bank will affect the alliance, ITG's chief executive, Mr John Nagle, said it will be enhanced as his company would be seeking to increase its business with any new owner.
The placing and open offer have been fully underwritten by Townsley & Co and Goodbody Stockbrokers, the group's joint stockbrokers. It has agreed to place 10.7 million new ordinary shares at 656 cents (517p and 420p sterling) per share of which 8.05 million will be placed with the placees, and 2.67 million will be subject to a claw-back under the open offer. The open offer is on the basis of one new ordinary share for every three ordinary shares held.
Before the announcement, the shares were quoted at 715 cents in Dublin but later rose to 747 cents. This puts the placing and open offer price at an 8 per cent discount on the share price before the announcement. On the AIM in London, the shares were 460p sterling but rose to 485p sterling after the announcement.
The directors have decided not to participate in respect of their entitlement to 987,905 shares which would have cost £5.1 million. These shares are included in the firmly placed shares. Mr Nagle said personally he did not have the funds to participate in the issue.
Under the terms of the contracts with Ulster Bank and Esat Digifone, ITG earns a fee on every transaction executed on the terminal owned by ITG. It said its strategy was to develop, within the next 18 months, a proprietary network of 10,000 terminals in Ireland, and 30,000 in Britain, at an estimated £923 a terminal - that includes installation and support costs.
"The directors believe that the speed of deployment of these terminals is key to exploiting the considerable opportunities which exist in this area," says ITG. It also believes that it is well placed to achieve a "significant competitive advantage in the card services business by utilising the group's range of existing resources".
